RSI Divergence Strategy: Catching Reversals Safely
RSI divergence is a classic reversal signal. Learn how to trade it with confirmation and avoid false signals. Regular and hidden divergences, with entries.
Regular Divergence
Bullish: Price lower low + RSI higher low. Bearish: Price higher high + RSI lower high. These signal potential reversals.
Hidden Divergence
Bullish: Price higher low + RSI lower low (continuation). Bearish: Price lower high + RSI higher high (continuation).
Confirmation Rules
Never trade divergence alone. Wait for: reversal candlestick, support/resistance confluence, 4H or Daily timeframe.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70-80% of retail investor accounts lose money when trading CFDs. Backtesting does not guarantee future results. Always consider whether you can afford the potential loss of your capital.